California’s Third District Court of Appeal affirmed the trial court’s ruling, denying the CEQA (California Environmental Quality Act) challenge to the City of Sacramento’s decision to approve a new downtown arena for the Kings.

What did the court say?

The arena project was not approved before the EIR (Environmental Review Report). The Court of Appeal held that the preliminary nonbinding term sheet with the developer in 2013 was not a “pre-commitment” because it allowed the City complete discretion to review the project, mitigate adverse environmental effects, and to refuse to approve the project. The Court also rejected the argument that the City’s acquisition of property before the project approval was not pre-commitment, since CEQA allows for eminent domain proceedings before completion of an EIR.

The City had no obligation to analyze a “remodel” alternative. The EIR had analyzed both a “no-project” alternative (keeping the existing facility) and building a new arena at the same site as the old facility. The Court found that analyzing a “remodel” alternative that would not achieve the City’s objectives to revitalize the downtown area would not have added anything to the analysis.

Riots are not a CEQA impact, and the I-5 analysis was adequate. The Court of Appeal found that there was no showing that crowd safety at the downtown arena was an environmental impact. The court also rejected claims that the City’s traffic analysis was required to specifically consider impacts on Interstate 5 traffic ranging from Canada to Mexico.

What Next? The appellate court had already ruled that the statue that modified CEQA was not unconstitutional and the denial of a preliminary injunction was proper. It is extremely unlikely that the California Supreme Court would review the Court of Appeal decision, so this lawsuit is likely to be at an end.

Even though we’re well into the new year, you may not have noticed some of the new laws that take effect in California this year. Here’s just a few that might affect you:

Plastic bag ban: Some plastic bags are banned in some stores. Large grocery stores and other stores such as Walmart and Target must stop providing their customers with so-called “single use” plastic bags by July; convenience stores and pharmacies must stop in 2016. Bags used for produce and meat are excluded, and other stores can still use them. Grocers will be required to charge customers at least 10 cents for (recycled) paper bags, or for multi-use plastic bags, which are often a dollar or more. The law is headed for a referendum to overturn it, so it may not go into effect.

Sick days: After July 1, nearly all California employers must provide at least 3 paid sick days to employees after just 90 days of employment.

Chickens and eggs: Since the passing of Proposition 2 in 2008, farm animals in California must have considerably more spacious living conditions than is the industry standard. Now, all eggs sold in California must come from chickens enjoying that California lifestyle, which effectively bars eggs from out of state. The result: have you seen the price of eggs lately?

Smartphone kill switches: In an effort to deter cell phone theft, starting July 1, all smartphones must have a “kill switch” allowing the owner to make the phone inoperable when not in his or her possession, i.e. if it’s lost or stolen. Of course, this will make it technologically possible for others–like government agencies and hackers–to switch the phones off too.

Pets and restaurants: Before this year, pets were banned from restaurants and bars, and restaurants owners faced a fine for health violations if they allowed it. Now, those businesses are free to welcome Fido in their outdoor eating spaces.

Mail-in ballots: Mail-in ballots have become increasingly popular. Before this year, they had to be received no later than election day, and they could be counted along with in-person votes. Now, they can be postmarked the day of the election, as long as they are actually received within three days of the election. Expect more delays in finding out the results in close elections.

The City of Sacramento has spent millions defending itself against lawsuits related to the downtown arena project. Earlier this week the court of appeals heard arguments in the final one, quizzing both sides about the environmental impact of the arena. What is this lawsuit about?

Last May, the day after the City certified its final Environmental Impact Report (“EIR”) and approved the arena project, Adriana Saltonstall and others filed a petition in Sacramento Superior Court claiming that (1) the City’s EIR was defective and (2) the statute expediting review under the California Environmental Quality Act (“CEQA”) was unconstitutional, and asking for a preliminary injunction to stop construction. Judge Frawley refused to grant a preliminary injunction and rejected all of Saltonsall’s claims:

Saltonstall claimed that the City “approved” the project before the EIR when it approved a non-binding preliminary term sheet in 2012. The judge ruled that the term sheet was not “approval” of the project.

Saltonstall claimed that the City failed to evaluate the alternative of remodeling the existing arena to achieve the project’s objective. The judge ruled that the project’s objective was a long term home for the Kings, and remodeling the existing arena would not achieve that objective.

Saltonstall claimed that the City failed to analyze or mitigate the arena’s traffic impacts because it didn’t count possible “standees” at events and didn’t address impacts on I-5. The judge ruled the City’s assumption that the attendance at each event would be full seating capacity, i.e. 17,500 attendees, was reasonable, and that the EIR did adequately address freeway impacts.

Saltonstall claimed that the City failed to analyze the potential “violence” of arena crowds. The judge ruled that speculation about potential crowd violence is not a CEQA issue.

Saltonstall claimed that the City failed to address the project’s impacts on housing. The court ruled that housing affordability is a social/economic and not a CEQA issue.

Saltonstall claimed that the City failed to analyze and mitigate impacts on historic Old Sacramento. The court ruled that the EIR did analyze those impacts.

Saltonstall claimed that a state statute that modified CEQA for the arena project was unconstitutional because it made it impossible for a court to grant a preliminary injunction and to meet shortened review deadlines. The court ruled that the statute did not impinge on the power of the court and was not unconstitutional.

Saltonstall appealed Judge Frawley’s rulings to the Third District Court of Appeal. The appellate court has already ruled that the statue that modified CEQA was not unconstitutional and the denial of a preliminary injunction was proper. On Monday the court heard oral arguments on the rest of Saltonstall’s environmental claims. Stay tuned to find out what it decides, but don’t bet on the appeals court doing anything to stop construction on the arena.

A recent California case entitled Richardson v. Franc shows what a court might do when property owners don’t agree about what can be done on an easement.

In 1989, Mr. and Ms. P built their dream home on property hidden from the street. The project included a 150-foot long driveway to the new house within an easement over their neighbor’s property. The easement was for access and utilities only. The Ps wanted a natural, attractive entrance to their home, and so landscaped, irrigated, and lighted both sides of the new driveway. For ten years, they maintained and improved the landscaping, at considerable expense.

The Ps sold the property in 2000 to Mr. R and Ms. D. By that time the driveway was significantly enhanced by mature trees and other plants and lighting. Over the years, the new owners added to the landscaping, and their gardeners spent up to half of their time on the driveway area.

In 2004, Mr. F bought the property over which the driveway ran. He knew that his neighbors had installed and maintained the driveway landscaping, and admitted that the trees were “beautiful and…just all-around attractive.” But in 2010—six years after Mr. F bought his property and two decades after the landscaping and other improvements began—Mr. F complained. Then, without any notice, he cut the irrigation and electrical lines, and disassembled the water valve pumps, and demanded that all of the landscaping and supporting systems be removed within 5 days. Mr. R and Ms. D sued, claiming they had an “irrevocable license” and/or an “equitable easement” that allowed them to landscape, irrigate, and light the driveway.

While “easement” and “license” are sometimes used interchangeably, they are not the same. An easement is an interest in real property; an equitable easement requires that he party claiming the easement must be without knowledge of the facts. Mr. R and Ms. D knew the easement was for access and utilities only. A license, on the other hand, is authority to do a certain act or acts on another’s land, i.e. a knowing act on someone else’s property, and may be express, or implied from the relationship of the parties and usage and custom.

The court said there was no equitable easement because Mr. R and Ms. D knew that the easement was for access only and did not include landscaping. But the court used its equitable power to find an irrevocable license because they and the owners before them had expended substantial sums and labor for landscaping and other improvements without any objection for more than 20 years.

The lesson? If you have spent time and money on an easement, you may have a right to continue to do so even when the property owner complains. But if you are trying to protect your property from what the easement owner is doing, speak up as soon as you find out about it.

In any case, if you need help with your residential or commercial real property issues, give us a call at 916-388-5100.

It’s not that hard to tell when you should call your doctor, or a plumber, or 911. But how does the average person know when to call a lawyer for help? After all, almost everything we do, from buying a house, to driving a car, to getting married, involves laws. Most of these things we are well able to handle without a lawyer at our side. And some issues and disputes may well benefit from the help of other professionals—therapists, or accountants, or your priest, minister or rabbi. So how do you know when you need legal help? Here’s a few general tips.

When do other people call lawyers?

Estate planning is one of the most common reason people who are not in a crisis hire a lawyer. Estate planning involves writing a will, often creating a living trust, and should always mean drafting powers of attorney for finances and health care. But can’t you do that yourself, using pre-printed forms? Maybe. But if you own a house, have children, are divorced, or have significant assets, it is wise to have legal help. Other matters include drawing up simple or complex contracts and agreements, as when you’re buying or selling small business, loaning money to family or friends, or leasing out your rental property; divorce/support/custody matters; partnership dissolutions; bankruptcy; when you’re involved in an accident; in probate disputes; in real estate transactions (but in California, unlike some other states, attorneys are not routinely involved in a simple residential purchase/sale). Obviously, criminal matters require legal help.

How soon should I call a lawyer?

Our first impulse when faced with a significant legal problem or crisis may be to wait and see; we all think we can and should be able to resolve our problems ourselves. And none of us want to spend money unnecessarily. But be honest: can you really handle this, or are you just hoping it all will go away? And do you even want to handle it on your own? Once you’ve admitted you need legal help, get in touch with a lawyer as soon as possible so that the problem can be managed before it gets out of hand.

If you think you may need a lawyer contact our office for help at 916-388-5100.

FOUR ESTATE PLANNING DOCUMENTS TO PREPARE FOR THE UNEXPECTED AND THE INEVITABLE

September is “National Preparedness Month,” and we’re seeing advice on having a plan in place in case of natural or man-made disasters, and lists of items to include in our disaster kits. While we don’t generally think about estate planning in quite the same way as, say, preparing for an earthquake, here are four essential documents you should have in order to be prepared for the unexpected (such as disability) and the inevitable (mortality).

Durable Power of Attorney (Financial). A “Durable Power of Attorney” is a simple and inexpensive way to ensure that someone will be able to manage your finances if you became incapacitated and unable to make financial decisions for yourself. It can be a blessing for your loved ones; without it, a court proceeding is likely necessary to obtain authority to act on your behalf. You name a person you trust to act as your agent; as long as you are competent, you can revoke a durable power of attorney at any time. In California, this form must be notarized or signed by two witnesses.

Advance Health Care Directive: There are two health care documents everyone should have: a durable power of attorney for health care that names someone you trust to oversee your health care if you become incapacitated, and a “living will,” a document spelling out the types of medical treatment you would or would not want to receive in certain situations. In California, a power of attorney for healthcare and a “living will” are combined into one form: an “Advance Health Care Directive.” Without this document, heath care decisions may wind up in the hands of people who do not know or care about your wishes.

Last Will and Testament. Without a will, when you die your assets will be distributed in a court process called “probate” to your legal “heirs” according to law; without a will it won’t matter that you told your favorite niece she should have your mother’s wedding ring. With a will, your assets will be distributed as you intend to your chosen beneficiaries (after payment of debts and taxes, of course). A will is an essential part of a complete estate plan that includes a living trust.

Revocable or “Living” Trust. With a living, or revocable, trust, all of your assets—your home, bank accounts, stocks, etc.—are put into the trust, used for your benefit during your lifetime, and then transferred to your named beneficiaries when you die without having to go through a court proceeding (called “probate”). (If, as sometimes happens, you have assets at your death that are not in the trust’s name, your will directs that those assets are transferred to the trust upon your death, and are then distributed to your chosen beneficiaries according the terms of the trust.) Of course, since it’s “revocable” you can amend or revoke the trust at any time, and it is likely you should do so upon major life changes: marriage, children, divorce, remarriage.

We’ve all heard stories about ugly fights between siblings over who gets what after mom or dad died. We may even have been involved in one of these battles. It doesn’t seem to matter whether there is a lot to fight over or not; long held sibling rivalries sometimes erupt once both parents are gone. What can you do to keep your own kids from fighting over your estate? While nothing can guarantee peace and harmony among your kids after you’re gone, here are five things you can do to minimize those disputes:

Don’t try to control your children from the grave. Yes it’s your money and property and yes you can do anything you want with it. But many conflicts begin when a parent treats his children unequally, even though one of those children may be successful and not “need” anything from you, or another may have acted badly and not “deserve” it. Consider family and sibling dynamics and the emotional as well as financial consequences of treating children unequally. Of course, if one child has special needs, your estate planning can include a “special needs trust” to handle that child’s share; and if one child has been a major care-giver you can make special provisions to account for that.

Don’t bring your kids to see your lawyer. Almost everyone with any assets at all will benefit from consulting a lawyer about estate-planning. And almost everybody is well-advised to have a living trust and will. But deal with your lawyer independently of your children or other relatives or even friends. You’ll be able to express your preferences, fears and desires openly, so that he or she can give you honest advice.

Keep your will and trust up-to-date. Major life changes—marriage, a new child, divorce, (and perhaps especially) remarriage—require updating your will and trust. Make sure those documents always reflect your current wishes. You simply can’t depend on your second wife or your oldest child or anyone else to take your intentions into account if those intentions are clearly expressed in a valid will and living trust.

Provide a plan for those sentimental items. So you have a clear estate plan as to your bank accounts and investments and real estate, and you think there is nothing to fight over. What about your personal property? Sibling rivalry can arise over sentimental items with little or no value, often leaving rifts that never heal. Include a fair method of dividing up those possessions; your lawyer can help you devise one.

Avoid surprises later: tell your adult children now. Last but not least, after your estate planning is complete, talk to your adult kids. Tell then who you are choosing to be executor, and why. Explain why Susie is getting her mother’s china, why a special needs trust is to be set up for Bobby, why the family home is to be sold and the proceeds divided equally (which doesn’t preclude the child who wants it so badly from buying it), and so on. If possible, set reasonable expectations: let them know how much you expect your estate to be worth. A little communication now may help to minimize disputes later on.

A loved one—relative or friend—has died with a will naming you as the executor. Or there is no will and the court has appointed you to be the “administrator” of the estate. Whether there was a will or not, whether you are called “executor” or “administrator” or your duties and liabilities as the personal representative of the estate are essentially the same.

The first thing to remember is that when the court appoints you as executor or administrator, you become an officer of the court and you assume certain duties and obligations by law. An attorney is best qualified to advise you about these duties and liabilities and help you with each step, but here is a simple guideline of what you will generally be expected to do:

1. INVENTORY THE ESTATE’S PROPERTY.

Locate all of the estate’s property. You must try to locate and take possession of all of the decedent’s property, including cash, bank accounts, investment accounts, real property and personal property.

Determine the value of the property. You must arrange to have a court-appointed referee determine the value of the property unless the appointment is waived by the court. You (not the referee) must determine the value of “cash items.”

File an inventory and appraisal. Within four months after “Letters” are issued to you as personal representative you must file with the court an inventory and appraisal of all of the assets in the estate.

File a change of ownership of real property. Along with filing the inventory and appraisal you must also file a change of ownership statement with the county recorder or assessor in each county where the decedent owned real property.

2. MANAGE THE ESTATE’S ASSETS.

Be prudent with investments. It generally takes some time before the estate’s assets will be distributed to the proper beneficiaries or heirs. While the assets are in your care you must manage them as a prudent person dealing with someone else’s property would. You must be cautious and not make any speculative investments. Except for checking accounts intended for ordinary administration expenses, estate accounts must earn interest.

Keep estate assets separate. You must keep estate money and property entirely separate from anyone else’s, including your own. A bank account for the estate must be in the name of the estate, not your own; similarly, securities and investment accounts must be held in a name that shows they are estate property.

Other restrictions. There are many other specific restrictions on your authority to deal with estate property, and consultation with your attorney is advisable concerning the legal requirements affecting such things as sales, leases, mortgages, and investments of estate property. Generally, you should not spend any of the money unless you have received permission from the court or your attorney has advised you that you may do so. You need a court order before you may fees to yourself or to your attorney.

3. GIVE NOTICE TO CREDITORS.

Decedent’s creditors must be notified of Decedent’s death and that that the estate assets are being administered. You must mail a “notice of administration” to each known creditor within four months after your appointment. If Decedent received Medi-Cal assistance you must notify the Director of Health Services within 90 days of your appointment.

4. MAINTAIN INSURANCE.

You should determine that there is appropriate and adequate insurance covering the assets and risks of the estate and keep it in force during the entire period of administration.

5. KEEP RECORDS.

Keep complete and accurate records of each financial transacting affecting the estate. In order to wrap up the estate and distribute the assets you will have to prepare and file with the court an account of all money and property coming into the estate, what you spent, and the date of each transaction, and describe in detail what is left. The court and any interested parties will be able to review your account, and assets generally may not be distributed until your account is approved.

6. CONSULT AN ATTORNEY.

An attorney can help you with all of these steps. His or her compensation for ordinary services in connection with estate administration is set by statute (as is yours), and will be paid out of the estate. Cooperate with your attorney, and when in doubt, call him or her and follow their advice.

It seems everyone has heard that a “living trust”—or more properly a “revocable living trust”—is a good way to “avoid probate” after you die. But fewer people know what that really means, and what way a trust can—and cannot–help during your lifetime and after death. Here’s five basic things you should know:

You control your assets during your lifetime. With a living trust, your assets—your home, bank accounts, stocks, etc.—are put into the trust, used for your benefit during your lifetime, and then transferred to your named beneficiaries when you die. Most people name themselves as the trustee in charge of those assets. And “revocable” means you can amend or revoke the trust at any time. Contrary to popular belief however, a revocable living trust is not protection against creditors.

You choose your successor trustee. While you will normally be the trustee while you are alive and capable, you name the person you trust to succeed you in case you become incapacitated and cannot manage the assets, and the person who will take over when you die. The terms of the trust will specify how those assets are to be managed if you are incapacitated, and how they are to be distributed at death.

You must transfer your assets into the trust. Once the trust is set up, you must transfer your assets into it. Deeds to your real estate must be prepared and recorded; bank and investment accounts must be put into the name of your trust. Sometimes lenders will not be willing to lend or refinance when real property is held by the trust; if real property is put into your name for financing purposes, be sure to transfer it back into the trust as soon as possible.

You still need a will. A living trust is part of a complete estate plan that includes a will. If, as sometimes happens, you have assets at your death that are not in the trust’s name, a will provides that those assets are transferred to the trust upon your death, and are then distributed according the terms of the trust.

You avoid probate court. At your death, assets held in your trust are managed by your chosen successor trustee and distributed to your beneficiaries without court supervision or involvement. This not only saves your heirs both time and money, but your assets, their value, and the identity of your beneficiaries can remain private. If your assets are not in a living trust when you die, they must go through probate: a court-supervised process for transferring your assets to your beneficiaries (if you have a will) or legal heirs (if you don’t).

If you have any questions or need help with your trust, call us at 916-388-5100 or email us at info@molaw.com we hope to hear from you soon!

As conservative and retired investors continue to seek income producing investments in this low interest rate environment, various Wealth Management and Financial Planning firms have ramped up marketing and sales of complex, commission rich and risky “Alternative Investments.” Securities regulators, such as FINRA, have warned brokers and investment professionals that “Alternative Investments,” such as Tenant In Common Real Estate offerings (TICs), Non-traded REITS and Business Developments Companies – all sold through “Private Placement” offerings – are suitable for most, if not all, retail investors. Representative of the real estate syndication industry admit to the outright fraud of promoters amongst their association. However the benefit of huge commissions paid to financial planners and brokers for selling these unsuitable products has encouraged continuing unlawful sales of “Alternative Investments” and has caused devastating losses to retirees and conservative investors alike.